Friday, August 6, 2010

Friday Roundup

The former DOJ top cop speaks, Senator Feingold joins the debarment discussion, anything is possible, and a House Resolution focused on BP ... it's all here in the Friday roundup.

Mendelsohn Interview

During the period of the FCPA's resurgence, Mark Mendelsohn was the public face and voice on FCPA issues at the Department of Justice. In April, he announced his departure and now maintains an FCPA private practice at Paul Weiss. (See here and here for more).

See here for Mendeloshn's recent interview with The Metropolitan Corporate Counsel as he reflects back on his DOJ tenure and other issues.

Senator Feingold Joins The Debarment Discussion

Earlier this week Senator Russ Feingold (D-WI) testified before the Senate Judiciary Subcommittee on Administrative Oversight and the Courts (see here). The hearing was on the topic of "Protecting the Public Interest: Understanding the Threat of Agency Capture." He began his testimony by stating that a better job needs to be done to ensure that there are no significant conflicts of interest or other inappropriate ties between regulators and the corporations they purport to regulate."

He then stated:

"I want to raise a concern that a new, more subtle type of agency capture is beginning to emerge as a result of our increasing reliance on government contractors. The Council of the Inspectors General on Integrity and Efficiency recently reported that the total number of suspensions and debarments in FY 2008 was half the total from five years ago, and that suspensions and debarments had been steadily decreasing over the last five years. This is a disturbing statistic, especially when you consider that the number of contract fraud, Foreign Corrupt Practices Act, and other corruption investigations involving contractors is on the rise."

For more on debarment issues, including an FCPA debarment bill pending in the House see here and here and here.

Is It Possible?

Is it possible to spend $3.2 million on "professional costs" associated with an internal investigation "limited in size and scope" to a branch office that represents approximately one-half of one percent of the company's annual consolidated revenues?

Apparently it is.

In January I ran this post about Team Inc. and its voluntary disclosure of less than $50,000 in potentially improper payments in its Trinidad branch.

Earlier this week, when disclosing its financial results, the company stated as follows:

"The results of the FCPA investigation were communicated to the SEC and Department of Justice in May 2010 and the Company is awaiting their response. The results of the independent investigation support management's belief that any possible violations of the FCPA were limited in size and scope. The total professional costs associated with the investigation were approximately $3.2 million." (emphasis added).

Exhibit A for how even isolated instances of improper conduct under the FCPA in a branch office can be very expensive or Exhibit A for just how out of whack professional costs associated with an FCPA internal investigation and disclosure have become?

It's your conclusion to make.

BP House Resolution

This recent post discussed Senator Charles Schumer's (D-NY) request that the Department of Justice investigate BP for FCPA violations.

On July 30, House Resolution 1597 was introduced. Sponsored by Representative Daniel Maffei (D-NY) and co-sponsored by Representatives Christopher Lee (R-NY) and Michael McMahon (D-NY) the resolution (see here) encourages the United Kingdom to "investigate British Petroleum (BP) for foreign corrupt practices."

The reason?

The same as offered by Senator Schumer - that BP attempted to influence the August 2009 release of Abdel Baset al-Megrahi, the Libyan terrorist convicted of the 1988 bombing of Pan-Am flight 103 that killed 270 people, including 189 Americans.

The resolution states, in part:

"Whereas the Scottish courts released al-Megrahi from prison on August 20, 2009, under the understanding that he was suffering from terminal prostate cancer;

Whereas the Scottish authorities have never clarified why al-Megrahi could not receive humane treatment while still in captivity;

Whereas al-Megrahi seems to have well outlived his original diagnosis;

Whereas it is very troubling that al-Megrahi received a hero’s welcome to his home country of Libya;

Whereas British Petroleum (BP) admitted on July 15, 2010, that a delayed prisoner-transfer between Britain and Libya ‘could have a negative impact’ on BP’s oil negotiations;

Whereas there are allegations that BP inappropriately attempted to affect the Scottish Government’s decision and possibly even the doctor’s diagnosis; and

Whereas al-Megrahi’s release sends an incredibly offensive message to the families that lost loved ones on Pan Am Flight 103: Now, therefore, be it

Resolved, That the House of Representatives encourages the United Kingdom to investigate British Petroleum (BP) for foreign corrupt practices."

As I asked in my original post - following Schumer's (and now Maffei's) lead will a British politician request that the U.K. Serious Fraud Office or the U.S. government investigate a U.S. company because it lobbied its own government officials in connection with a business purpose?


A good weekend to all.

1 comment:

  1. "Whereas the Scottish courts released al-Megrahi from prison..."

    The Scottish courts DID NOT release al-Megrahi from prison - he was released following a quasi-judicial decision by the Scottish Cabinet Secretary for Justice Kenny MacAskill, MSP.

    "Whereas there are allegations that BP inappropriately attempted to affect the Scottish Government's decision and possibly even the doctor's diagnosis;"

    Are you idiots so incredibly stupid that you make resolutions on unfounded and unproven allegations? At NO time did BP ever attempt to influence the decision to release al-Megrahi.

    The "doctor's diagnosis" referred to is clearly that of Dr. Karl Sikora, whose recommendation was NOT part of the of the decision as it was NOT received until 4 days AFTER the release of al-Megrahi.

    5 May 2009 - Application received from Libyan Government requesting prisoner transfer of al-Megrahi under the Prisoner Transfer Agreement.

    24 July 2009 - Application received from Abdelbaset Ali Mohmed al-Megrahi requesting release on compassionate grounds.

    3 August 2009 - Decision on prisoner transfer of al-Megrahi under the PTA expected.

    20 August 2009 - Decision made to release Abdelbaset Ali Mohmed al-Megrahi on compassionate grounds.

    Whilst Mr al-Megrahi applied for, and was granted, permission to abandon his second appeal this action was only necessary with regard to the Prisoner Transfer Agreement but NOT for release on compassionate grounds.

    The Government of the United Kingdom has absolutely NO LEGAL AUTHORITY to interfere in Scots law or the Scottish legal system. A little bit of research would have discovered that.

    '74. ...By the time of the Union a well-defined and independent system of Scottish law had been established. This was recognised in the Union settlement, which provided for the preservation of the separate code of Scots law and the Scottish judiciary and legal system. Under Article XIX the two highest Scottish courts - the Court of Session and the High Court of Justiciary - were to continue, and were not to be subject to the jurisdiction of the English courts. These bodies have remained respectively the supreme civil and criminal courts in Scotland, while beneath them there is a completely separate Scottish system of jurisdiction and law courts, with a judiciary, advocates and solicitors, none of whom are interchangeable with their English counterparts....

    76. ...Nevertheless the two systems remain separate, and - a unique constitutional phenomenon within a unitary state - stand to this day in the same juridical relationship to one another as they do individually to the system of any foreign country.'


    By the way, as far as Senator Menendez and his 'kangaroo court' is concerned the newspaper 'Scotland on Sunday' (, August 1, 2010, published the results of an online poll which asked the following question -

    'Should Kenny MacAskill have agreed to appear before the US Senate investigation on Lockerbie?'

    YES: 8%, NO: 92%.